Inco Purchased by Brazilian Firm

A Brazilian mining firm has purchased Inco, the Canada-based producer of a healthy percentage of the world’s nickel.

The acquisition makes Brazil’s CVRD the world’s second largest mining company, according to news reports. The company’s $17 billion purchase of Inco adds nickel production to an already strong iron ore portfolio.

According to news reports, CVRD will dissolve Inco’s board of directors and will no longer list the company’s shares on either the Toronto or New York stock exchanges.

But to help make the deal palatable to the Canadian government, CVRD has reportedly agreed to base its nickel business in Toronto while retaining Canadians in key management posts.

A pledge not to lay off Canadian workers for three years and to increase investment in Inco’s Canadian operations is also part of the deal, according to a BBC News report.

The soaring prices for nonferrous metals have helped prompt a number of large-scale deals in the metals market.

In August, the European firm Xstrata took control of fellow Canadian nickel miner Falconbridge after a proposed Inco-Falconbridge merger could not be worked out.

The October CVRD-Inco deal put the newly combined firm behind only Anglo-Australian BHP Billiton in the mining sector.

Arizona-based copper producer Phelps-Dodge was also a bidder for Inco, but CVRD’s bid was considered more beneficial by shareholders.